Professional indemnity insurance (PII) costs saw dramatic swings for insurance intermediaries in 2020.
According to data from the Financial Conduct Authority (FCA), the largest advice firms earning more than £10m per year saw their PII costs rise by 2.5% last year.
This £19,200 increase took the typical PII fee for the industry’s biggest firms to more than £772,000, although this remained at around 1.1% of average income.
In contrast, mid-size firms earning between £500,000 and £10m per year enjoyed a substantial real-terms cut in their typical fees for PII cover.
The average fee for these brokerages fell by more than £31,000 to £55,500 – a whopping 36% cut which meant their PII premium dropped to 2.4% of regulated revenue from 4%.
The smallest intermediaries earning up to £100,000 revenue saw a 4.67% increase worth £100 taking their typical premiums to £2,315.
But those slightly larger businesses earning between £100,000 and £500,000 enjoyed a 3.5% cut in PII premium reducing their fee by £226 to £6,180.
The FCA data does not breakdown any further, so it is not possible to show how much was paid by those operating in the health or protection markets compared to their general insurance colleagues.